Myanmar is in crisis. 1 An interlocking set of political, economic, and. Burma-Myanmar: The U.S.-Burmese Relationship and Its Vicissitudes

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1 7 Burma-Myanmar: The U.S.-Burmese Relationship and Its Vicissitudes David I. Steinberg Myanmar is in crisis. 1 An interlocking set of political, economic, and social problems faces the present military government, known as the State Peace and Development Council (SPDC). Some of these problems, such as minority issues, were inherited as early as independence in 1948 and inherent in the formation of the state at that time. Some evolved from the civilian administration ( , ), and some from the previous military government ( ). Many problems have been exacerbated by the military regime since the coup, in 1988, that brought the present government to power. The present state of the Burmese economy is the worst since independence. The World Bank has designated Myanmar a low-income country under stress, indicating especially severe developmental problems. 2 The political stalemate between the ruling military and the opposition National League for Democracy (NLD), led by Nobel laureate Aung San Suu Kyi, forestalls significant reforms in any sector, and the tenuous ceasefires with a multitude of minority groups are fragile. Relationships between the majority Burmans, comprising two-thirds of the population, and multitudes of various minorities remain the most enduring of issues with which any administration in Myanmar must cope. It is an issue that must be addressed at the National 209

2 210 David I. Steinberg Convention, which is tasked with developing a new constitution for the state, but satisfaction among all parties under any formula is most unlikely. Burma was a state without ever being a nation with an overarching ethos that promoted national unity. Ethnically fragmented, Burma following independence from British rule on January 4, 1948, experienced a plethora of problems. The Union of Burma was a constitutional parliamentary government led by a disparate coalition of civilians in the Anti-Fascist People s Freedom League (AFPFL), a political party that had been formed against the Japanese at the close of World War II. Although it experienced rebellions from the left and some ethnic strife, its bicameral legislature constitutionally allowed minority representation. Its economic policies were moderate and democratic-socialist, representing the Burman need to retrieve economic power that had been held by foreigners (Europeans, Indians, and Chinese) in the colonial era. To forestall civil war as the AFPFL political coalition fragmented, the military took over in 1958 for eighteen months in an action approved by the parliament in what was called a constitutional coup, and as it promised, it returned the country to civilian rule after a free election in which the military s preferred civilian party lost. The next two years of civilian rule under Prime Minister U Nu economically and politically failed. He established Buddhism as the state religion. Although Buddhism had always been given special status, this move angered some of the powerful minorities, some of which were Christian, others that were Muslim. The military believed the state was fragmenting, which was unlikely at that time but which gave the military the excuse for decisive action. 3 The civilian leadership was arrested and civilian institutions, such as the legislature and the courts, were abolished. This second military coup in 1962 ushered in what was evidently viewed as perpetual military rule by its elite. Authoritarian repression has been evident in Burma-Myanmar since that time. Before the coup of 1988, Burma from 1962 to 1974 was ruled by a military junta through decrees of the Revolutionary Council led by General Ne Win. A rigid socialist system was introduced under the military-led Burma Socialist Programme Party (BSPP) shortly after the coup. Socialism was to provide both legitimacy and a secular national ideology around which the whole state could rally and replace the still-revered Buddhism as the societal focus. After extensive political propaganda, a new constitution was formulated, elections were held, and a single-party mobilization system was established under a 1974 constitution modeled on Eastern European precedents. This

3 The U.S.-Burmese Relationship and Its Vicissitudes 211 was a unitary, centralized state, enforced with power located within the BSPP, which meant military control. Even the modest autonomy previously granted the minorities was rescinded. The periphery was without effective voice. A unicameral legislature, the Pyithu Hluttaw, was a means to legitimate military authority. A single slate of BSPP candidates for election was proposed from the center, and no choices were permitted. Although elected representatives were obligated to return to their constituencies to learn the problems of their electorate, the system did not work, as fear prevented criticism of the military hierarchy and its policies and programs. General Ne Win was the most influential, if not the most efficacious, of the state s leaders. He was first deputy head of the army at independence, then commander in 1949, minister of defense and sometimes deputy prime minister under civilian rule, then head of the caretaker government, chairman of the Revolutionary Council from 1962, and then from 1974 continued his preeminent role as president of the state until When he retired from that position, he remained the commanding influence in society through his personal entourage and as chairman of the party until He was as thoroughly powerful as any dictator in the modern world. 4 In March 2002 he was effectively marginalized with the arrest and later conviction of his grandsons and son-in-law in a purported attempted coup that seemed to outside observers questionable. Ne Win s influence was over, and he died in his Rangoon home in December Yet in the period from 1962 to 1988, when the World Bank, the Asian Development Bank, Japan, the United States (after 1979), the Federal Republic of Germany, and other donors were most active, the socialist policies of the government, and the absence of political and other rights denied by a ubiquitous military intelligence system, were not issues in their assistance programs. The BSPP regime failed through economic incompetence, political repression, and minority disaffection, leading to the third military coup, on September 18, 1988, which was designed to shore up the military as the ruler in spite of the earlier failed political and economic programs by the previous military-led government. That military administration changed its name from the State Law and Order Restoration Council (SLORC) in 1997 to the SPDC, but its top leadership remained intact. This fall from political and economic grace a functioning if creaky democracy with a well-educated elite and an economy with the potential for growth and development has been precipitous and tragic for its diverse peoples, who remain among the poorest in Asia.

4 212 David I. Steinberg The nexus of political repression, internal rebellions, whimsical and whimsically administered economic policies and programs, social dislocation, and deprivation make Myanmar a case of not only arrested development but also development denied in spite of the potential. The internal traumas spill across borders, affect international relations, and cause humanitarian concern worldwide. All these raise international questions over the future of the state and its peoples. The Promise Once called Burma, now officially known as Myanmar, that area of mainland Southeast Asia in ancient times was known as Suvannabumi (the Golden Land), a land filled with promise. From the earliest geographic references, in the second century, the region was considered fortunate. Natural resources were abundant, the area was sparsely populated for its size, famines were unknown in contrast to India and China, and the social system seemed more benign than in many other states. Women in traditional Burma were the equal of men, not subject to foot binding as in China or suttee as in India, and their status was said by European travelers in the early nineteenth century to be higher than that of women in Europe at that time. Burma in the nineteenth century was regarded as the most literate society between Suez and Japan. A late-nineteenth-century guidebook to Burma noted that the traveler who arrived in Rangoon from Calcutta would breathe a sigh of relief as he or she walked down the gangplank. If in the mid-1950s one were to have speculated on which of the countries of Asia had the greatest opportunity and prospects for economic and social development, Burma would have been rated at the top. It had been the largest rice exporter in the world just before World War II (3.123 million tons in 1940), and an exporter of oil. It held 75 percent of the world s teak reserves and the world s best jade and rubies and even unexplored mineral wealth. Burma had an excellent higher education program, relatively equitable income distribution, extensive English language skills, and a functioning democracy with a British-based legal system and well-trained Burmese lawyers. The status of its women was high. Burma seemed placed for takeoff and participation in the world. It had, to be sure, been devastated by World War II and by a variety of political and ethnic insurrections after independence in These rebellions reflected the heritage of arbitrary, colonialimposed boundaries and administration that separated minority areas from Ministerial Burma, or Burma proper, where the Burmans lived. Yet it had

5 The U.S.-Burmese Relationship and Its Vicissitudes 213 held together and seemed on the road to recovery. Foreign aid organizations of all stripes and pedigrees competed for Burmese attention, as Burma was wooed by all in the cold war. Burma also had a glorious explosion of architectural achievement beginning with the eleventh century at Pagan, an ancient capital and one of the most important historic sites in contemporary Southeast Asia. Its Buddhism to the outside world seemed benign and offered a softer, more humane, approach to the developmental process. 5 Even in the period of the military caretaker government ( ), when democracy was suspended and during which the tatmadaw (armed forces) came to temporary power to prevent what might have developed into a civil war between opposing civilian politicians, those eighteen months were universally regarded as ones of accomplishment and success. 6 Law and order were restored, cities were cleaned up, prices were autocratically lowered in the bazaars, a border agreement was signed with China, and the hereditary authority of the minority Shan sawbwas (maharajas) was legally, if not socially, rescinded. The tatmadaw expanded the Defense Services Institute, a military-run and -owned conglomerate of many industries that appeared to be extremely effective. 7 After the military voluntarily relinquished power to a civilian administration, as it had promised, international academics and theorists used the Burmese example as a prime case in the generic study of the military as the most important developmental force in the third world because it was allegedly rational, goal oriented, and developmentally inclined. In retrospect, although one may fault the theoreticians for perhaps being unconsciously influenced by the perceived need of the West to support authoritarian governments in the midst of the cold war, the Burma case offered a certain realistic example of effective military government. This taste of power and its successful conclusion gave the military confidence that it could administer the country and run the economy and, thus, influenced their future role, although with devastating results. The difference may have been in the temporary and effective mobilization of effort in contrast with the later expectation of perpetual military control. Then why, after such promise, has Burma-Myanmar become a failing or dysfunctional state, or one whose economy has collapsed? 8 Why has Burma- Myanmar never even approached reaching its potential and, instead, had a per capita gross domestic product of US$151 in 2001, below that of Laos (with US$330) and Cambodia (one of the least developed countries in the world, with US$270)? Why did it take thirty years ( ) for its per capita income to reach pre World War II levels? Was it economic policies,

6 214 David I. Steinberg issues of governance, internal unrest, some or all of these or other factors that have led to promise denied? What also has caused Burma-Myanmar to have episodically troubled relations with the United States? Was it primarily the cold war? This quintessential neutral state, whose ambassador to the United Nations, U Thant, became the secretary-general of that institution because of Burma s centrality to East- West struggles, was buffeted by conflicting ideological and political forces, prompting the severance of U.S. economic assistance programs on three occasions. Why, indeed, should the United States once again be interested in this state, ignored for almost three decades? What national interests, if any, prompt the United States to consider or reconsider its diplomatic and economic relations, and how does the history of such interaction color the expectations and realities of both sides? What does the latest involvement of the United States in the region, the war on terrorism, mean to the future of Burmese society, growth, and equity and its contacts with its neighbors and the nations beyond its periphery? Can the United States do anything to assist political and economic change in Burma-Myanmar? The Reality Soothsayers picked the date and time of independence and predicted a planned and prosperous future for Burma; U Nu s pyidawtha (cool, or happy, land) development program of moderate socialism was the goal. They were proven wrong about the future. Burma s past promise belies Myanmar s present reality. Myanmar is not in a state of collapse; rather, if collapse indicates a previously economically developing or developed state, then it is precollapsed. As a set of some 67,000 essentially self-contained villages, it could limp along at barely subsistence levels if the state did not make egregious demands on its peasantry. Its recently burgeoning urban population is less dependent on urban services because most have strong and recent ties to the hinterland. One-quarter of the population of Myanmar, according to the World Bank in 1999, lives below the poverty line and an equal percentage subsist at it, indicating that even a slight economic downturn would pauperize them. Income disparities are growing and becoming increasingly obvious. Rampant and fluctuating inflation some 30 percent in 2002 but underreported by the state by an estimated 100 percent by knowledgeable observers destroys living standards, and civil servants cannot live on their salaries.

7 The U.S.-Burmese Relationship and Its Vicissitudes 215 Malnutrition, even hunger, exists; the extent is not known, but it is thought to be spreading and intensifying. Official statistics, always questionable and optimistic in Myanmar and subject to significant regional differences, indicate that the average family spends 71 percent of income on food alone, of which 20 percent is on rice. Infant mortality is higher than in any other country in the region except Laos and Cambodia. 9 Wasting affects 30 percent of children under ten years of age. The country s health care is said to be the world s second worst. Educational standards have declined through school closures (sometimes for years), truncated schedules, inadequate teachers and facilities; a quarter of school-age children do not attend primary school, and only a third of them complete it. Per capita spending in constant currency on education has diminished even as the government has expanded the numbers of students at all levels of education. Private tutorial schools have been established to do what the public sector was intended to do provide education and pay teachers but these are expensive and the province of the relatively well-off. Social service spending (health and education) in Myanmar is the lowest in the region as a percentage of the national budget, and its military budget is the highest. Foreign aid is minuscule; except for humanitarian assistance, it is mostly from China. In 1997, when foreign economic assistance to Myanmar was about US$1 per capita, it was US$14.70 in Vietnam, US$41.70 in Cambodia, and US$82.40 in Laos. 10 The minority areas, through both revolution and neglect, have been denied developmental opportunities. Through a web of tenuous ceasefires (in which, however, the former insurgents retain their arms), the government has access to many of those areas, but in some it is regarded as much the same as a foreign occupying army with its negative implications. Myanmar s military rulers exist in a self-constructed cocoon, isolated from most of the trauma associated with civilian life. The 450,000 troops plus their dependents have their own well-managed and -equipped educational and health facilities, their own distribution mechanisms for food and staples at subsidized prices, housing for dependents and jobs for many of them at military-run commercial factories and establishments, and even their own religious institutions. The Burmese military is a state within a state. Yet this isolation is only half real. Although largely insulated from external social vicissitudes, the military s power pervades the state to a degree remarkable on any world scale. It can continue because it mandates its own budgets and is autonomous in its internal affairs. It also directly administers the government at all levels and controls the civil service, which is clearly subordinate to the military command. Civil society was essentially emasculated from

8 216 David I. Steinberg 1962 to 1988, although since then it has been allowed to expand in apolitical spheres. No pluralistic centers of political power or influence exist beyond the purview of the state except those in direct revolution. It barely tolerates a titular opposition, composed of ten political parties, of which the overwhelmingly important one is the NLD, led by Aung San Suu Kyi. These parties are effectively prohibited from normal political and organizational activities, and many members have been arrested. The military still offers the greatest opportunities for the advancement of youth, since there are so few others. All avenues of social mobility education, mass organizations, the sangha (monkhood) are under military supervision. Civil society, in a contradiction of the term, exists on the sufferance of the military command structure; it is, to paraphrase, alive and well and controlled by the government. The private business sector of any consequence is closely monitored and needs military acquiescence to succeed. 11 Capital for private economic activities and agricultural improvements is lacking, and incentives are generally absent, as the government owns all the land. Careers for the educated in business are still nascent. The ubiquitous Union Solidarity and Development Association (USDA) with some 16 million members, or about 38 percent of the total population, reaches virtually into every family, is mandated as under military control, and has some quasi-military training as well as general educational functions. It was formed as an alternative to the BSPP, which had failed, and is likely to be used to support the military s position and views in any potential civilianized administration. 12 It is also used to turn out crowds for government-organized demonstrations. The military has its own private sector as well, one distinct from public economic activities, the State Economic Enterprises, which it also controls. These include the operation of commercial factories under the Ministry of Defense s Office of Procurement that produce for the civilian market as well as for the military itself: the Myanmar Economic Holdings Corporation, formed as an autonomous organization under the Companies Act, and the Myanmar Economic Corporation, founded under a special edict. These two massive, military-run conglomerates will be outside of control of any future civilian administration. Together they have dozens of joint ventures with foreign firms and employ hundreds of thousands of workers in a wide variety of businesses and industries. Burmese industry is at the most elementary level of industrialization, swamped by cheaper and better goods smuggled or now legally imported from China and Thailand and further hindered by past jejune economic policies. Politically, although a member of the Association of Southeast Asian

9 The U.S.-Burmese Relationship and Its Vicissitudes 217 Nations (ASEAN), the regime is regarded as a pariah in much of the industrialized world because of its political repression. 13 Yet some of the military s national goals and programs, stripped of their excessive rhetoric, are unexceptionable. National unity, better health care and education, and preservation of national culture could be the goals of any developing state. Yet the methods the military employs to achieve these ends are leading to failure. The government believes with reason that its impressive accomplishments in building infrastructure of all sorts have been unappreciated outside Myanmar. But in some sense, the tatmadaw perhaps unconsciously equate construction with legitimacy, a very tenuous basis for noncoercive governance. 14 The Causes Some observers posit one of two causes for Myanmar s faltering. Foreign observers blame internal Burmese economic policies, and many Burmese (especially those in the military) blame foreign interference. Both are partly correct, but neither cause separately or together is an adequate explanation. Internally, macro- and micro-economic policies have been inept and ineptly administered. Externally, there have been problematic foreign influences. It is easy, but perhaps simplistic, to point to the failed economic policies of the governments of Burma-Myanmar, both civilian and military, as the primary forces of economic failure. There is no question that these policies have been more than instrumental in Burma-Myanmar s plight and may even have been the precipitating factors. But these policies are based on fundamental attitudes, which prompted the introduction and acceptance of these policies, not to mention the whimsical changes that continue to affect them. All the sequential economic policies of the state since independence have failed. Moderate socialism under civilian leadership ( , ) was poorly administered. Then doctrinaire and autarkic socialism ( ) under the military miserably miscarried under an already weakened bureaucracy, further purged by the military of its most knowledgeable civilian members. This was followed by a modified approach to socialism and the pursuit of foreign assistance ( ) and finally by the abandonment of the socialist system in 1988 (but not dirigiste attitudes toward the private sector) and the introduction of what was said to be a market economy and openings to foreign investment. All have been problematic in conception and execution. A concatenation of policies has had calamitous effects on the economy, the quality of life, and foreign investment. These include internal planning

10 218 David I. Steinberg and management that have been destructive of Burmese potential, exacerbated by poor macroeconomic policies such as the continued expansion of the money supply, which has fueled inflation (prices in the bazaar by the summer of 2002 had risen about fifteen times since 1988). Generally repressive agricultural production and procurement policies forced paddy sales to the state at far below market prices. 15 Excessive spending on defense (real levels of expenditure are hidden and probably total half of the government s budget), three demonetizations (the last and most disastrous in 1987 and one of the fundamental causes of the people s revolution of 1988), and arbitrary changes in economic investment and trade policies, together with ubiquitous and necessary corruption for lower level civil servants, all contribute to the problems. The failure of economic, and with it social, performance by all governments of Burma-Myanmar also cannot be attributed alone to external events, although they have contributed to the economic malaise and are often blamed by Burmese nationalists. The optimistic miscalculations (by American advisers to that government) on the world price of rice following the Korean War were detrimental to Burmese economic planning and the delivery of social services; rice exports were less than half of those planned, and prices were lower. Later, the isolation of society and the withdrawal of most foreign economic assistance negatively affected development. Internal rebellions were sometimes surreptitiously assisted from abroad and denied the government effective economic control over perhaps a third of its land area. All Burma s neighbors and Britain and the United States indirectly supported these rebellions for a generation following independence, each for its own nationalistic objectives the United States to encourage Chinese Nationalist troops to retake the mainland, the Thai to protect their frontier, the Chinese to spread communism, the Bangladeshi (East Pakistanis before them) to protect Muslims in the Arakan, and others as well. These factors resulted in a perceived need for very high military expenditures, and a military rationale of security that remains internally, not externally, focused. The growing costs of imports and the low prices of Burmese exports, the sanctions imposed by the United States, and the Asian financial crisis of 1997 that effectively cut Asian direct foreign investment into Myanmar, all were factors in the economic doldrums into which Burma-Myanmar sank. The latest foreign influences on the economy have been the U.S. sanctions of 1997 and 2003 and the 2003 freezing of Burmese assets, which affects all U.S. dollar transactions going through U.S. banks. But these were not the sufficient or primary causes, which had roots in society itself and in its history.

11 The U.S.-Burmese Relationship and Its Vicissitudes 219 More basic to an understanding of the dynamics of Burma-Myanmar as a failing economic state are deeply ingrained attitudes toward governance, permeating internal and external economic relations. These stem from a profound sense of vulnerability and a lack of cohesiveness that result in extreme nationalistic, even xenophobic, reactions to economic, social, and political issues. This vulnerability, not unusual in a state that once experienced a colonial occupation, seems to be more pervasive and has lasted longer in Burma- Myanmar than in many other societies because of unresolved ethnic issues and an unfortunate colonial history that is continuously exploited, and embellished, as a cause of current and past woes. Fundamental concepts of governance and power also detrimentally affect social, political, and economic progress. Burma-Myanmar is a state yet not a nation. The military, echoing the writing of General Aung San who brought independence to Burma, continuously invokes the unity of the diverse peoples of society who have been together in weal and woe. Yet the British separation of Ministerial Burma (essentially, the Burman ethnic areas) from the peripheral frontier areas (of minority peoples), which were governed separately on the Indian model (and until 1937 Burma was a province of India and governed first from Calcutta and then from Delhi), further split a society fomenting a lack of ethnic understanding, with suspicions and animosities that remain. Some two dozen ethnically based rebellions were prevalent in the peripheral areas when the SLORC took power in Within the space of a few years, the SLORC engaged in a series of negotiations, with about three-quarters of them resulting in ceasefires. The minority groups were allowed to retain their arms and to engage in traditional agriculture. The central government is attempting to supply social services to these groups and giving economic investment opportunities (mining, logging) to some. By using ascriptive notions of ethnicity common in nineteenth-century Europe, and in claiming that the Shan, the Karen, and other groups are ethnic categories embodying living social formations with unique and independent histories, ethnic labels became reified into claims for the existence of political nations within Burma other than that recognized as the Burmese state. 16 The numerous attempts by both civilian and military governments to create an overarching national ethos that could unite these diverse peoples have yet to succeed. With at least one-third of society composed of non-burmans of various levels of political sophistication, population, religion, and potential economic influence, the appeals of Buddhism as the unifying force (although highly important among Burmans) were nationally unsuccessful, even divisive

12 220 David I. Steinberg among significant Christian or Muslim populations. Then socialism as the secular ideology also failed, although it was strenuously pushed by the military, which saw it as having the potential (that Buddhism lacked) to unify the state and to help the state move forward economically. With the demise of socialism as ideology in 1988 (although the state s role in the economy remains pervasive), the present focus by the military on the military itself as the central and unifying element of society has yet to prove itself. History has been rewritten, massive military-related museums built, the past romanticized to show the military s efficacy and cetena (good will, actions taken with loving kindness). 17 The vulnerability of national unity, the cardinal element in the military s national goals, remains their most vital concern. The attempted imposition of a national ideology from communism in the former centrally planned economies, to juche (autonomy, self-reliance) in North Korea, to pancasila in Indonesia has failed. It is unlikely that the present emphasis on the military as the unifying force will rally the people, in spite of mass mobilization under military auspices. This vulnerability is expressed through a fear of foreigners and their influence in society and economy. This attitude, based on historical memory, is understandable, though not unique among former colonies of the great imperial powers. Without exaggeration, it is accurate to state that during the colonial period the Burman population lost control not only over the political processes but also over their own economy. Europeans controlled the big businesses, and the British imported Indians to staff the bureaucracy, to take jobs as skilled professionals, to fill manual labor jobs, to man much of the military, and to work as subsidized indentured labor in the expanding ricebased economy of the Irrawaddy Delta. Indians controlled much of the trading and credit systems as well. Rangoon, Burma s capital, was as much an Indian as a Burmese city. In 1930, 53 percent of the population was Indian. The influx of Chinese both overland from Yunnan Province and by sea from South China filled the bazaars. The Burmans then were not only subordinated in governance, they were also relegated in large part to be mortgaged agricultural workers and petty traders in the bazaars. Although a small percentage of upper-class Burmans had the resources to be educated in England (and later became important in the politics of Burma), they were a limited and elite group. Thus it was not primarily the Fabian socialism of the London School of Economics that influenced Burmese society, although that school of thought was fashionable at the time of the rise of Burmese nationalism and the struggle for independence and seemed to support Burmese and Buddhist interests.

13 The U.S.-Burmese Relationship and Its Vicissitudes 221 It was rather the need economically, socially, intellectually, and emotionally to get the economy back under Burman control. 18 This has remained a cardinal element of Burmese thinking and is still evident after the 1988 demise of socialist policy and the openings to the private sector, both indigenous and foreign, wherein the government maintains a strongly dirigiste attitude toward all businesses. Suspicion of the development of autonomous centers of power in the business community, foreign and domestic, that could subvert control by the center seems also to be prevalent. In spite of some Burmans, including those in the military in their private capacities, making money in trading, there remains a strong suspicion of such activities as exploitive of the population. So in the caretaker government period, the army could simply force merchants to lower prices. As U Nu, civilian prime minister and devout Buddhist, remarked, capitalism bred greed, which was not a good Buddhist concept. This negative attitude toward foreign intervention and control is not only prevalent in the sphere of economics but was and still is also evident in policy dialogue with foreigners on more fundamental issues and on attitudes toward foreign economic assistance. Pervasive in official announcements is also the belief that Burmese culture (more accurately, Burman culture) is under threat from the imposition of deleterious foreign influences (read, U.S. popular culture) and that subversion of society is the aim of foreigners through intermarriage of different races with the Burmans. 19 The perceived vulnerability of the Burman population and authorities to the role of foreigners was exacerbated by the actual and implicit influence and support given by foreign entities to the internal rebellions that plagued the state then and that continue at a more modest level. Surrounding states, in an earlier era after independence, contributed support to a variety of insurrections: Bangladesh (East Pakistan) to the Muslim rebels in the Arakan (Rakhine), India to the Nagas in northwest Burma and to some of the Chin, the Chinese to the Burma Communist Party, and the Thai at various levels to a variety of insurrectionist buffer states along the western Thai littoral (to protect the conservative government in Bangkok from the radical regime in Rangoon). British elements have been accused of fostering independence among the Karen, and the United States covertly supported the remnant Chinese Nationalist (Kuomintang) troops who retreated into Burma in The relationships between individual minority peoples and their ethnic peers across international frontiers have been significant as well, because the borders of the state imposed by the colonial powers were ethnically arbitrary

14 222 David I. Steinberg and took no account of ethnicity. Thus the minorities had stronger external ties than did the Burmans, who were the only major ethnic group completely contained within the state. There is a Shan (Tai) autonomous region in Yunnan (Sipsong Banna), and there are, for example, more Kachins in China than in the Kachin state in Burma, more Nagas than are in India (Nagaland). The Chin in Burma are part of the Mizo group in India (Mizoram), the Karen and Mon straddle the Thai border, and the Arakanese are closely related by religion and culture to the Bangladeshis. This outward orientation was made more acute by the fact that Christian populations were in contact with international Christian movements and that Burmese Muslim groups were subject to Middle Eastern influences. Such outward orientation increased the Buddhist Burman sense of isolation, already exacerbated by the political and economic policy of cutting off the country from the outside world. Significantly, the higher ranks of the military have been stripped of minority officers, and promotions to higher ranks seem to require Buddhist allegiance. Critical to effective governance in the modern world is a pervasive Burman political culture that affects both modernization and development. Power is conceived of as limited, not infinite, so sharing or delegating it (individually, institutionally, geographically) becomes difficult. As a zero-sum game, to share it is to lose it. Power thus becomes highly personalized, with loyalty not to institutions but to leaders. This results in factionalism; the development of entourages in highly structured and hierarchical relationships; a system of rent seeking to grease the skids of such entourages; control of information (and thus the sponsorship of orthodoxy and control over media and publishing); and the discouragement of pluralistic centers of power (which are in danger of developing in a growing civil society with significant local autonomy and an influential private business sector). Some argue that Burmese politics are atavistic. 20 These tendencies are reinforced by a military command system that makes more taut the hierarchical structure and in which the leadership the single individual who eventually emerges at the apex of the hierarchy is insulated from external education and concepts, operates with only a limited understanding of external administration and norms, and whose decisions are not to be contradicted, even questioned, yet who is often shielded from unpleasant but vital information as data are manipulated. 21 Further, the Burmese fear of foreigners and lack of understanding of their operations have been made more evident and palpable through both world developments and their impact on Burma-Myanmar. Although Japan has

15 The U.S.-Burmese Relationship and Its Vicissitudes 223 been the primary donor to Burma-Myanmar since independence in 1948 supplying more than half of all bilateral and multilateral economic assistance (US$2.2 billion until 1988) it is the United States, with its industrialized influence and military power, about which the government seems most concerned. 22 U.S. Interests in Burma-Myanmar To the United States, Burma was a British preserve until World War II, except for American Baptist missionaries who, mostly in the nineteenth century, worked effectively among non-burman, non-buddhist groups, some of whom readily responded to their new teachings. The United States significantly contributed to the campaign to wrest Burma from the Japanese, who had occupied that country early in World War II. 23 At an emotional or ideological level, President Franklin Roosevelt was interested in freeing the colonies from their colonial masters throughout Asia, but little real action took place in that regard. U.S. interests in Burma were essentially a product of the cold war. The defeat of the Kuomintang Nationalist government in China in 1949 and the formation of the People s Republic of China in 1950, together with the Korean War that same year, gave immediate focus to the anticommunist sentiment in the United States, which had already become apparent in Europe and in the American military occupation of South Korea ( ). An official investigative team was sent from Washington in 1950 to the countries of Asia, including Burma, to see what types of assistance the United States might provide to stem this perceived communist advance (communistinspired uprisings in Burma, the Philippines, Malaya, and Vietnam). Although the magnitude of such aid and the administration of its provisions were nowhere comparable to the U.S. Marshall Plan that had assisted Western Europe in its recovery from World War II for similar anticommunist reasons, the precedent had been set, and U.S. foreign assistance programs soon followed. Burma was the first country to recognize the People s Republic of China (PRC), and since that time, in spite of problems in the relationship, Burma may have felt it had to be neutral in the cold war and in the Sino-Soviet dispute, but it was always a neutrality in the shadow of a vast China and with an eye on the Chinese reaction. Given the long, indefensible border with China and China s massive population, Burma has always been vulnerable. 24 The U.S. aid program started soon after Burmese independence, but because of

16 224 David I. Steinberg covert U.S. and Taiwanese support to the nationalist troops that had fled from Yunnan into Burma (and who, with U.S. prodding, hoped to reinvade China and overthrow the People s Republic), the Burmese government under U Nu was fearful that the Chinese would pursue them into Burmese territory over which the Burmese central government (and indeed Shan state government) had little or no control. In spite of vehement but misleading U.S. denials that the Central Intelligence Agency (CIA) was funding Kuomintang (KMT) troops, the Burmese government stopped the U.S. aid program. 25 In 1956 the program was restarted, and it lasted through the coup of 1962 and into the beginnings of the socialist period. It was again stopped in 1964 by mutual agreement because of rigid socialist policies and disagreement about projects, especially the siting of the proposed new road to Mandalay. 26 With a change in foreign assistance policy at the first BSPP Congress in June July 1971 when the decision to seek foreign aid was endorsed, and following the end of the Vietnam War in 1975, the Burmese may have felt more comfortable in requesting the restart of U.S. assistance in Because the previous agreement between the U.S. and Burmese governments on the administrative aspects of the assistance program was never terminated but was just held in abeyance, the program could then easily be resuscitated. That program, focused on basic human needs, lasted until the coup of 1988, when it was once again ended by the United States. 28 The cold war and the perceived threat of Chinese expansion were not the only reasons the United States sought to continue good relations with Burma. 29 Rangoon, with both Chinese and Soviet embassies active there, was a useful listening post for observing the Sino-Soviet split, and both countries had foreign assistance programs. The United States was also concerned with the trade in heroin, which was flooding the United States from Burma. Stopping the production and supply of opium which was converted into a morphine base and then into heroin became a U.S. priority, so the United States supplied equipment and helicopters to carry out narcotics surveillance and interdiction. The equipment was to be used solely for antinarcotics activities, but it became apparent that it was used against the Karen rebels, who shot one down, and also used to transport military officials on non-narcotics-related trips. Burmese heroin production at that time supplied some 75 percent of the world market (that honor now goes to Afghanistan), but the opium was grown in remote areas of the country over which the central government had no control. The narcotics trade was able to fuel the supply of arms to various

17 The U.S.-Burmese Relationship and Its Vicissitudes 225 insurgent groups. Although the Burma Communist Party (BCP) eschewed opium production in its territories as long as it was supported by the PRC, when that support stopped, the BCP went into production in the Wa tribal areas. This production continues today, although it is significantly lowered. The U.S. State Department s periodic reporting on narcotics in Burma indicates that although the local military must either acquiesce to or be involved in the production or movement of narcotics, it has no evidence that the central Burmese authorities directly benefit from the trade. Nonetheless, according to some observers, narcotics principals who have surrendered live undisturbed in Rangoon and have invested in legitimate businesses there. 30 The United States calls this money laundering. Myanmar is engaged in an extensive antiopium campaign. Production has dropped to 850 tons in 2001 from 2,500 tons at its peak some years earlier, and the Burmese government has destroyed about 8 percent of production. 31 Since the failed people s revolution against the BSPP military regime, the coup of 1988 designed to shore up military control over society, and the end of the cold war, U.S. interests have been refocused. U.S. concerns from 1988 through the end of the Clinton administration concentrated on the absence of political rights in Myanmar, including the military s denial of the results of the May 1990 elections, which were swept by the opposition NLD led by Aung San Suu Kyi (who had been under house arrest since July 1989). When she received the Nobel Peace Prize in 1991, she became an international symbol of the fight against political oppression. Essentially, U.S. policy from 1988 through 2001 was on a single track: human rights. Economic, strategic, narcotics, even humanitarian issues were not pursued. The human rights policy was in part dictated and supported by an effective human rights lobby in the United States and the industrialized world; the lobby comprises various nongovernmental organizations and expatriate Burmese and is mobilized in large part through the Internet. Reflecting the views of Aung San Suu Kyi, these activists have advocated a boycott on tourism, trade, investment, and NGO activities as providing support to and legitimating that military junta. Some of these positions, such as on NGO operations, have been modestly modified. Had not the military coup been so brutal in 1988 in repressing the popular riots throughout the country, the United States and the industrialized world would have welcomed the most important economic policy change by the military since 1962: the abandonment of socialism and the opening of the economy to both the foreign and domestic private sectors. Private interests, both U.S. and international, did exploit Burmese natural resources,

18 226 David I. Steinberg most specifically oil and natural gas. The Burmese themselves became a controlled, literate, productive, and low-cost labor force for the production of, for example, textiles and garments. Prompted by Congress (in which no member could be seen to be voting in favor of a pariah regime ), which in turn was spurred by human rights groups and activists, the United States imposed sanctions in 1997 on all new U.S. investment in the country (an arms embargo had existed since the coup of 1988, and the foreign assistance program, which had been focused on basic human needs, had also been closed down) as punishment for the suppression of political rights. 32 Although the U.S. government, especially the legislative branch that was effectively lobbied by articulate and well-coordinated human rights groups, was reluctant to become economically engaged, other countries were not so reluctant. Until the Asian financial crisis of 1997, which effectively dried up investment in Myanmar, since much of it came from the ASEAN states, approved foreign investment totaled more than US$6 billion (actual projects were probably one-third of that total). Investment has since restarted, and Myanmar is increasingly used as a site for garment production, as other states used Burma s quotas for export to the United States. 33 This came to an end with U.S. sanctions in 2003, but Burma s share of textiles into the United States would have dropped in any case with the end of the Multifiber Agreement on December 31, As the internal economic, social, and political ills of Myanmar spread across the borders in the region, the neighboring states and the United States began to pay more attention. Some 130,000 Karen and fewer Mon refugees, fleeing political repression and war, are in camps in Thailand along the Myanmar border. Perhaps one million illegal workers from the Shan state and other areas are either seeking employment or are moving under forced evacuation from what has become free-fire zones, in which the military tries to deny to Shan rebels the bases of local support. Drug trafficking, the exploitation of women for prostitution, and the rapid and alarming spread of HIV-AIDS, where the highest rates in Thailand and China are along the Myanmar littoral, have become regional concerns. The World Health Organization estimates that there may be 420,000 cases; the government, after years of denial, admits to 180,000. Aung San Suu Kyi, the NLD, and their supporters abroad had vigorously campaigned against humanitarian assistance, foreign investment, and tourism because of supposed benefits to the military and its legitimation. With the deepening of the crisis and the release of Aung San Suu Kyi from virtual house arrest in May 2002, this attitude has been modified. The need

19 The U.S.-Burmese Relationship and Its Vicissitudes 227 for increased humanitarian assistance to Myanmar mainly through international NGOs, often but not always under the UN Development Program umbrella, has been understood both by the military and the opposition. Burmese authorities have permitted international NGO activities under individual ad hoc arrangements; now several dozen NGOs have operations in the country, many with resident offices and local staffs. These organizations work with local apolitical groups focusing on everything from rural development, health, nutrition, and education, to microcredit projects and community development. Such international groups offer no threat to local or national authorities. Some are encouraged by the government to work with local arms of state-sponsored organizations, such as the USDA, but in general even groups at the local level have a degree of marginal, noncontroversial autonomy on some local problems. The rationale behind this effort in overall developmental terms is the re-creation of local civil society organizations, which eventually could have a positive impact both on development and on the growth of pluralism in society. Opium production has decreased markedly in Myanmar, partly due to weather but mostly to the increased efforts of the Burmese government. Yet the shift has been away from poppy production and its agricultural base as a subsistence crop for upland farmers to the chemical production of methamphetamines, which have flooded Thailand and have become a political issue there. Thus continued major production of methamphetamines indicates that the central government cannot or will not control the trade. The Thai estimate that from 700 million to 1 billion tablets were smuggled into Thailand from Myanmar in Through the United Nations program, the United States has been supporting their antinarcotics efforts. In early 2003, the Thai Thaksin government began a major crackdown on the illegal Thai trade in narcotics, with the resulting death of an estimated 3,000 people: alleged dealers, others associated with the trade, and innocent bystanders. Thai civil rights groups have protested these actions. Of less concern, but of great potential importance to the United States, is the strategic place of Myanmar. Myanmar is a nexus of potential rivalries among China, India, and the ASEAN states. In the Sino-Indian War of 1962, Burma flanked the still disputed border between those two countries. Although China may not feel a threat from India, the reverse is not true. Indian defense minister Fernandes announced in the late 1990s that China was India s potential enemy. Chinese penetration of Myanmar has been extensive, in the supply of military materiel (some US$2 billion in arms and equipment), the training of officers, the construction of infrastructure, a